Labour Force Survey (LFS)

Status:
Active
Frequency:
Monthly
Record number:
3701

The Labour Force Survey provides estimates of employment and unemployment which are among the most timely and important measures of performance of the Canadian economy.

Detailed information for November 2014

Data release - December 5, 2014

Description

The Labour Force Survey provides estimates of employment and unemployment which are among the most timely and important measures of performance of the Canadian economy. With the release of the survey results only 13 days after the completion of data collection, the LFS estimates are the first of the major monthly economic data series to be released.

The Canadian Labour Force Survey was developed following the Second World War to satisfy a need for reliable and timely data on the labour market. Information was urgently required on the massive labour market changes involved in the transition from a war to a peace-time economy. The main objective of the LFS is to divide the working-age population into three mutually exclusive classifications - employed, unemployed, and not in the labour force - and to provide descriptive and explanatory data on each of these.

LFS data are used to produce the well-known unemployment rate as well as other standard labour market indicators such as the employment rate and the participation rate. The LFS also provides employment estimates by industry, occupation, public and private sector, hours worked and much more, all cross-classifiable by a variety of demographic characteristics. Estimates are produced for Canada, the provinces, the territories and a large number of sub-provincial regions. For employees, wage rates, union status, job permanency and workplace size are also produced. For a full listing and description of LFS variables, see the Guide to the Labour Force Survey (71-543-G), available through the "Publications" link above.

These data are used by different levels of government for evaluation and planning of employment programs in Canada. Regional unemployment rates are used by Human Resources Development Canada to determine eligibility, level and duration of insurance benefits for persons living within a particular employment insurance region. The data are also used by labour market analysts, economists, consultants, planners, forecasters and academics in both the private and public sector.

Statistical activity

Together, four surveys tell a more complete story of current labour market events. These surveys are: the Labour Force Survey (LFS), the Survey of Employment, Payrolls and Hours (SEPH) Employment Insurance Statistics (EIS) and Job Vacancy Statistics (JVS). The LFS focuses on its strengths: timely data on the labour market, including the unemployment rate and demographic analysis. SEPH reports, which come out later each month, show greater detail on non-farm industry employment and earnings. EIS provides substantial detail on recipients of EI regular benefits by detailed geography, by socio-demographics and by former occupation. JVS offers information on labour demand by reporting on the number of job vacancies by industry.

Reference period:
The 15th of the month
Collection period:
The week following the reference period

Subjects

  • Employment and unemployment
  • Hours of work and work arrangements
  • Industries
  • Labour
  • Occupations
  • Unionization and industrial relations
  • Wages, salaries and other earnings

Data sources and methodology

Target population

The LFS covers the civilian, non-institutionalised population 15 years of age and over. It is conducted nationwide, in both the provinces and the territories. Excluded from the survey's coverage are: persons living on reserves and other Aboriginal settlements in the provinces; full-time members of the Canadian Armed Forces and the institutionalized population.These groups together represent an exclusion of less than 2% of the Canadian population aged 15 and over.

There are no questions in the LFS that ask respondents whether they are temporary foreign workers. Therefore it is not possible to produce counts of, or employment numbers for, temporary foreign workers from the LFS. If contacted for the LFS, temporary foreign workers will be included only if they identify the selected dwelling as their usual place of residence. In addition, they cannot be separated from a larger group of respondents who were not born in Canada and who are not landed immigrants. In 2013, the 'other' category represented 2% of the employed population and would therefore have a negligible impact on the overall employment numbers. Also included in this group are: Canadian citizens by descent who were born elsewhere, foreign students with a study permit, claimants of refugee status or family members of immigrants who are not landed immigrants themselves.

National Labour Force Survey estimates are derived using the results of the LFS in the provinces. Territorial LFS results are not included in the national estimates, but are published separately.

More details about the survey population can be found in the Guide to the Labour Force Survey, section 4.1- Population coverage, available through the "Publications" link above.

To view the LFS geographical maps, please select the "Additional documentation" link below.

Instrument design

The current LFS questionnaire was introduced in 1997. At that time, significant changes were made to the questionnaire in order to address existing data gaps, improve data quality and make more use of the power of Computer Assisted Interviewing (CAI).

The changes incorporated included the addition of many new questions. For example, questions were added to collect information about wage rates, union status, job permanency and workplace size for the main job of currently employed employees. Other additions included new questions to collect information about hirings and separations, and expanded response category lists that split existing codes into more detailed categories.

The questionnaire was also extensively restructured in terms of the order of the questions and the flows between questions. For example, the job description questions about the current (or most recent) job were moved near the beginning of the questionnaire so that this information (especially the class of worker) could be used to control some of the question flow, question wording and applicable response categories in later questions. As well, some questions known to be problematic were modified through rewording or the inclusion of additional questions (e.g., the hours of work question series and the identification of persons on temporary layoff).

Since the existing questionnaire had been designed as a paper questionnaire, the questionnaire redesign represented an opportunity to make extensive use of the power of CAI. This included the incorporation of question wording that depended upon answers to earlier questions, more complex question flows and an extensive set of on-line edits checking for logical inconsistencies.

The implementation of the new questionnaire followed an extensive process of user consultations, questionnaire development and questionnaire testing. The questionnaire was phased in over a five-month period between September 1996 and January 1997.

Sampling

This is a sample survey with a cross-sectional design.

The LFS uses a probability sample that is based on a stratified multi-stage design. Each province is divided into large geographic stratum. The first stage of sampling consists of selecting smaller geographic areas, called clusters, from within each stratum. The second stage of sampling consists of selecting dwellings from within each selected cluster.

The LFS uses a rotating panel sample design so that selected dwellings remain in the LFS sample for six consecutive months. Each month about 1/6th of the LFS sampled dwellings are in their first month of the survey, 1/6th are in their second month of the survey, and so on. One feature of the LFS sample design is that each of the six rotation groups can be used as a representative sample by itself.

Within selected dwellings, basic demographic information is collected for all household members. Labour force information is collected for all civilian household members who are aged 15 and over.

Since July 1995, the monthly LFS sample size has been approximately 54,000 households, resulting in the collection of labour market information for approximately 100,000 individuals. It should be noted that the LFS sample size is subject to change from time to time in order to meet data quality or budget requirements.

With the recent increase in coverage in Nunavut, the sample for all three territories is representative of the working-age population of each territory. Nunavut was initially designed to cover ten of the largest communities in the region, representing about 70% of all Nunavut residents aged 15 years and over. The increase in survey coverage in that territory, effective in the spring of 2009 and retroactive to the winter of 2008, brings it on par with the other two territories (96% in the Northwest Territories and 92% in both Yukon and Nunavut).

The LFS sample is allocated to provinces, territories and regions within provinces to meet the need for reliable estimates at various geographic levels. These include national, provincial, territorial, census metropolitan areas (large cities), economic regions and employment insurance regions.

To obtain details of the sample allocation guidelines and sample size by province and territory, please refer to section 4.2 and 4.5 of the Guide to the Labour Force Survey.

Data sources

Responding to this survey is mandatory.

Data are collected directly from survey respondents.

Data collection for the LFS is carried out each month during the week following the LFS reference week. The reference week is normally the week containing the 15th day of the month.

LFS interviews are conducted by telephone by interviewers working out of a regional office CATI (Computer Assisted Telephone Interviews) site or by personal visit from a field interviewer. Since 2004, dwellings new to the sample in urban areas are contacted by telephone if the telephone number is available from administrative files, otherwise the dwelling is contacted by a field interviewer. The interviewer first obtains socio-demographic information for each household member and then obtains labour force information for all members aged 15 and over who are not members of the regular armed forces. The majority of subsequent interviews are conducted by telephone. In subsequent monthly interviews the interviewer confirms the socio-demographic information collected in the first month and collects the labour force information for the current month. Persons aged 70 and over are not asked the labour force questions in subsequent interviews, but rather their labour force information is carried over from their first interview.

In each dwelling, information about all household members is usually obtained from one knowledgeable household member. Such 'proxy' reporting, which accounts for approximately 65% of the information collected, is used to avoid the high cost and extended time requirements that would be involved in repeat visits or calls necessary to obtain information directly from each respondent.

View the Questionnaire(s) and reporting guide(s) .

Error detection

The LFS Computer Assisted Interviewing (CAI) questionnaire incorporates many features that serve to maximize the quality of the data collected. There are many edits built into the CAI questionnaire to compare the entered data against unusual values, as well as to check for logical inconsistencies. Whenever an edit fails, the interviewer is prompted to correct the information (with the help of the respondent when necessary). For most edit failures the interviewer has the ability to override the edit failure if they cannot resolve the apparent discrepancy. As well, for most questions the interviewer has the ability to enter a response of Don't Know or Refused if the respondent does not answer the question.

Once the data is received back at head office an extensive series of processing steps is undertaken to thoroughly verify each record received. This includes the coding of industry and occupation information and the review of interviewer entered notes. The editing and imputation phases of processing involve the identification of logically inconsistent or missing information items, and the correction of such conditions. Since the true value of each entry on the questionnaire is not known, the identification of errors can be done only through recognition of obvious inconsistencies (for example, a 15 year-old respondent who is recorded as having last worked in 1940).

Imputation

All identified discrepancies, logical inconsistencies and missing information are resolved either automatically by the head office processing system or through manual intervention. This is accomplished through the imputation of logically consistent values.

Where possible, deterministic imputation is used to resolve any inconsistent or missing information using other information provided by the respondent. When this is not possible, information for an individual may be carried forward from the previous month (if it exists) under certain circumstances. In other instances hot deck imputation is used, which involves copying information from another individual (i.e., a 'donor') with similar characteristics.

Estimation

The final step in the processing of LFS data is the assignment of a weight to each individual record. This process involves several steps. Each record has an initial weight that corresponds to the inverse of the probability of selection. Adjustments are made to this weight to account for non-response that cannot be handled through imputation. In the final weighting step all of the record weights are adjusted so that the aggregate totals will match with independently derived population estimates for various age-sex groups by province and major sub-provincial areas. One feature of the LFS weighting process is that all individuals within a dwelling are assigned the same weight.

In January 2000, the LFS introduced a new estimation method called Regression Composite Estimation. This new method was used to re-base all historical LFS data. It is described in the research paper "Improvements to the Labour Force Survey (LFS)", Catalogue no. 71F0031X. Additional improvements are introduced over time; they are described in different issues of the same publication.

Quality evaluation

Selected data from the LFS are regularly compared to similar data from the Survey of Employment, Payroll and Hours (SEPH, survey record 2612), the Survey of Labour Income and Dynamics (SLID, survey record 3889), Employment Insurance data and the Census.

As well, economists working with the LFS often compare Gross Domestic Product (GDP) data with that of the LFS to see if labour market trends are in line with general economic performance. Other comparisons include:

Manufacturing shipment data and LFS manufacturing employment;
Dwelling starts, building permits and construction employment;
Retail and wholesale sales and trade employment.

Disclosure control

Statistics Canada is prohibited by law from releasing any data which would divulge information obtained under the Statistics Act that relates to any identifiable person, business or organization without the prior knowledge or the consent in writing of that person, business or organization. Various confidentiality rules are applied to all data that are released or published to prevent the publication or disclosure of any information deemed confidential. If necessary, data are suppressed to prevent direct or residual disclosure of identifiable data.

The LFS produces a wide range of outputs that contain estimates for various labour force characteristics. Most of these outputs are estimates in the form of tabular cross-classifications. Estimates are rounded to the nearest hundred and a series of suppression rules are used so that any estimate below a minimum level is not released.

The LFS suppresses estimates below the following levels:

Canada 1,500
Newfoundland 500
Prince Edward Island 200
Nova Scotia 500
New Brunswick 500
Quebec 1,500
Ontario 1,500
Manitoba 500
Saskatchewan 500
Alberta 1,500
British Columbia 1,500
Yukon 200
Northwest Territories 200
Nunavut - 10 largest communities 200

Since the sample design, rotation pattern and reliability criteria are different in the three territories from those in the ten provinces, estimates for the territories are not included with the provincial totals, but rather they are calculated and reported separately as a part of each of the extended projects.

Revisions and seasonal adjustment

Seasonal Adjustments - Most estimates associated with the labour market are subject to seasonal variation, that is, annually-recurring fluctuations attributable to climate and regular institutional events such as vacations, and holiday seasons. Seasonal adjustment is used to remove seasonal variations from almost 3,000 series, in order to facilitate analysis of short-term change for major indicators such as employment and unemployment by age and sex, employment by industry, and class of worker (employee or self-employed). Many of these indicators are seasonally adjusted at national and provincial levels. Seasonal adjustments are made using the X-12-ARIMA method. Main labour force status estimates are also seasonally adjusted for census metropolitan areas (CMAs), and published as three-month moving averages to reduce irregular movements caused by relatively small sample sizes.

At the start of each year the seasonally adjusted series are updated and revised according to the latest data and information for seasonal models and factors. The seasonally adjusted series are usually revised back three years.

Estimate adjustments further to census - Adjustments are also made to LFS data every five years after new population estimates become available following the most recent census. At that time, all LFS data back to the previous census is re-weighted using the new population estimates (since the new population estimates will cover the inter-censal period between the two most recent censuses), and all corresponding historical LFS estimates are revised.

Therefore, at the beginning of 2011, all estimates were adjusted to reflect 2006 Census population counts and LFS estimates have been revised back to January 1996. It is further described in the research paper The 2011 Revisions of the Labour Force Survey (LFS), Catalogue no. 71F0031XWE201101.

Data accuracy

Since the LFS is a sample survey, all LFS estimates are subject to both sampling error and non-sampling errors.

Non-sampling errors can arise at any stage of the collection and processing of the survey data. These include coverage errors, non-response errors, response errors, interviewer errors, coding errors and other types of processing errors.

Non-response to the LFS tends to average about 10% of eligible households. Interviews are instructed to make all reasonable attempts to obtain LFS interviews with members of eligible households. Each month, after all attempts to obtain interviews have been made, a small number of non-responding households remain. For households non-responding to the LFS, a weight adjustment is applied to account for non-responding households.

Sampling errors associated with survey estimates are measured using coefficients of variation for LFS estimates as a function of the size of the estimate and the geographic area.

Documentation

Data file